Intraflagellar transport (IFT) is a highly conserved process in ciliated eukaryotic cells that mediates the bidirectional movement of a protein complex (IFT particle) between the base and tip of cilium. Mutations that impair or disrupt IFT result in defects in cilia formation and cause severe developmental abnormalities and disease pathologies. Recent studies have uncovered that the developmental abnormalities in IFT mutants are due, in part, to loss of a normal cellular response to hedgehog (Hh) signaling. The hedgehog signaling pathway is essential for development of most tissues and as such is tightly regulated through both negative and positive regulatory factors. These regulator effects are often mediated by posttranslational modifications and proteolytic cleavage of proteins such as the Gli transcriptional factors. These modifications, which are regulated by Hh signaling, dictate whether these transcription factors act as activators or repressors of Hh target genes. In addition, the Hh signaling pathway is regulated through alterations in the localization of effector proteins. This has recently been shown for the transmembrane protein smoothened (Smo), which translocates to the cilia in response to Hh, as well as for Gli proteins that cycle between the cytosol and nucleus. Although several components of the Hh pathway (Gli1-3, SuFu, and Smo) have now been localized in the cilia of mammalian cells, the importance of this ciliary localization and the role of IFT in regulating cellular responses to Hh pathway activity remain obscure. Current data suggest that IFT is required to promote efficient processing and/or activation of the Gli transcription factors. Thus, the objective of this proposal is to further elucidate the cellular and biochemical mechanism(s) connecting IFT to Gli posttranslational modifications that regulate Hh signaling activity. In this proposal we will assess whether IFT is involved directly in the transport of the Hh signaling proteins into and out of the cilium and whether posttranslational modifications that regulate Gli activity occur in this organelle. Furthermore, we will determine whether known factors involved in Gli3 proteolytic cleavage or regulation of this process are associated with cilia and are also dependant on IFT. Finally, our in vitro analyses will be complemented through a series of in vivo studies that will evaluate the importance of IFT in eliciting differential cellular responses to Shh signals within a developmental field with regards to specifying cell fates. Overall the successful completion of this proposal will provide important mechanistic and cellular insights into the evolutionary divergence that has occurred in the mammalian and Drosophila Hh signaling pathways and will help determine how loss of IFT results in severe developmental and patterning defects. Public Health Relevance: The cilium is a small organelle extending off the surface of most mammalian cells. Recently it was found that cilia play an important role in regulating patterning of the limb as shown by the fact that disruption of this organelle leads to severe developmental abnormalities including a truncated limb and formation of extra fingers and toes. Thus, the overall objective of this proposal is to conduct a series of experiments that will lead to a better understanding of the molecular role that cilia play in regulating signaling events dictating how the limb forms.